A financial audit is an independent examination of an organization's financial statements to ensure they are accurate, complete, and prepared in accordance with applicable accounting standards.

Audits provide assurance to stakeholders—such as investors, regulators, and management—that the financial statements are reliable and free from material misstatements, thereby enhancing trust and transparency.

Financial audits are typically performed by independent auditors, such as certified public accountants (CPAs) or chartered accountants (CAs), who have no affiliation with the organization being audited. ​

Not all companies are mandated to undergo financial audits. Requirements vary by jurisdiction and depend on factors like company size, industry, and whether the company is publicly traded.

Internal audits are conducted by an organization's own staff to assess internal controls and processes, while external audits are carried out by independent auditors to provide an objective evaluation of the financial statements.

The duration of an audit depends on the organization's size and complexity. It can range from a few weeks to several months.

The auditor issues a report expressing an opinion on the financial statements, which can be unqualified (clean), qualified, adverse, or a disclaimer of opinion, depending on the findings.

While audits are designed to detect material misstatements, they are not primarily focused on uncovering fraud. However, auditors do consider the risk of fraud during their assessment.

Internal controls are processes implemented by management to ensure the integrity of financial and accounting information. They are crucial in auditing as they impact the auditor's risk assessment and testing procedures.

Maintain accurate and organized financial records, ensure compliance with accounting standards, and address any known issues in advance. Open communication with the auditors can also facilitate a smoother audit process.